France and Spain collect digital taxes, Google will increase advertising fees

09/03/2021 16:39 GMT + 7

The increase in advertising fees, Google said, is to ‘offset part of the digital services tax compliance costs in France and Spain’.

Google announced that it will increase advertising fees by 2% on French and Spanish platforms from May this year, to offset the impact of digital taxes on profits.

France and Spain collect digital taxes, Google will increase advertising fees.

France had previously taxed it digitally from 2019, and Spain levied it under pressure from voters this year, requiring giant U.S. tech companies to pay higher taxes in countries. family where they do business.

In France, Internet companies with global revenues of more than 750 million euros ($ 895 million) and more than 25 million euros ($ 30 million) in France have to pay a 3% digital tax, especially unit of sale of advertising and marketing activities. Spain also imposes a 3% tax on US technology giants. Jean-Luc Chetrit, head of Union des marques, the major French brand alliance, said that Google’s decision will “cut off the ability to invest in brands when all companies are going through a crisis. never happend”.

Google didn’t respond to a request for comment, but Karan Bhatia, Google’s vice president for government affairs and public policy, warned in February: “Taxing digital services will lead to a tradeoff. We urge governments to reconsider these tax laws, or at least suspend tax collection while negotiations continue. “

American tech giants like Google, Apple, Facebook and Amazon are becoming targets for European governments. They are accused of using common market rules to declare all EU profits in low tax jurisdictions such as Ireland or Luxembourg.

Critics say that during the Covid-19 outbreak, the rise in online activities as more and more people chose to work from home and maintain a safe social distance. a lot for these multinationals, but tax authorities in many countries have lost millions of euros in revenue.

However, these companies argue, they are affected by unfair and discriminatory tax rules. Amazon responded to France’s tariffs in October of last year, increasing the fees for French sellers in the French market by 3%. Apple followed suit, increasing the commission it charged French, Italian, and UK developers selling apps on the App Store platform.

France’s global taxation of digital companies has made the country a pioneer in an attempt to find a fair financial system for multinationals on the Internet. The taxes and fees that these multinationals pay are usually negligible relative to their income.

Facebook said there are currently no plans to increase ad rates in France or Spain as it awaits a global deal on fiscal rules. France’s digital tax revenue generated 400 million euros ($ 480 million) for the national treasury in 2019. Despite pressure from the Trump administration to cancel the tax, the French government has taxed back last year.

With US President Joe Biden entering the White House, Organization for Economic Cooperation and Development (OECD), which oversees digital tax negotiations, expressed hope for a meeting of finance ministers. The G20 in July will reach an agreement on this issue. Last month, the new Finance Minister Janet Yellen confirmed that the US no longer complies with the “safe harbor” clause, which means it will participate in global tax agreements, thus alleviating the relationship. the main focus of EU officials.

Phong Vu